I went to settings > Video but did not find something like "ask for tv" or something like that. Because on my G5 there is an option where you can either watch on ipod or TV. But on the Ipod Touch there is no such option. So how can I watch movies on TV from my Ipod Touch? I do have the cable (TV-out cable red-white-yellow heads that connects to Ipod Touch).

You have to get the new cable. Any of the old cables don't work with the new line of iPods. (iPod classic, iPod touch, iPod nano, etc...) If you have one of the new cables released late in 2007, then when you start a video with the cable plugged in, before it starts it will ask you whether or not to display it on a TV.